firm divides customers into different groups and charges a different price to each group of consumers, though all consumers within particular group pay same price

total profit maxes when MR = MC in "total" market

Predatory Pricing

where firm sets price below its AC in order to drive other firms out of business

may do so by cross-subsidising losses in one market with profits from elsewhere

Peak-load Pricing

where consumers charged more for a service at peak times than at off-peak

higher peak may reflect higher demand, or higher costs due to supply constraints

another form of price discrimination

Inter-temporal Pricing

occurs where different groups of consumers have different price elasticities of demand at different points of time, so are charged different prices at different points of time (eg mobile phone release)

form of price discrimination

Two-part Tariff

pricing system where consumer pays a fixed fee for access to service and then separate charge for usage

form of price discrimination

Loss Leader

good which has its price cut (often to below AC) in order to attract customers into a store

Full-range Pricing

is where firm determines prices for all products collectively, so as to max total profits across its full range of products

may involve loss leaders

relevant when firm sells substitutes and/or complements

By-product

G/S produced as a result of producing another G/S

costs and revenues should be set where combined MR= MC

price for each then determined from individual demand curve for each

Transfer Pricing

pricing system used in large organisations such as multinationals, where intermediate goods are transferred between different divisions of organisation

charge each intermediate product at marginal cost, so end price of product reflects total MC of production